Ireland finally emerged from the eurozone’s longest-running recession in the first three months of this year — but the road ahead still looks rocky.
Ireland is struggling to prop up its banks and cope with falling tax revenues after the decade-long Celtic Tiger boom and has one of the biggest debt burdens in the eurozone. Its deficit was the biggest in Europe compared with the size of the economy last year.
Irish Government figures show that in the first quarter gross domestic product rose 2.7 per cent compared with the preceding quarter, exceeding the 1 per cent growth expected by analysts. The last positive change in GDP against the previous quarter occurred at the end of 2007.
GDP fell 0.7 per cent, though, compared with the same period last year.
Gross national product, another measure of how well the economy is performing, fell by 0.5 per cent compared with the previous quarter.
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Separate data showed that the number of people claiming unemployment benefit in Ireland rose by 5,800 this month, on a seasonally adjusted basis, to 444,900.
The Government is trying to manage the economy by enacting a series of severe austerity measures including cuts to unemployment benefits, child benefit and public sector pay, and higher prescription charges.
The recovery has been hampered by the reluctance of Irish banks to lend.
Brian Cowen, the Irish Prime Minister, told the Irish Parliament: “We have to hope that there will be no further turbulence in markets. There is no room for complacency here.”
Mr Cowen reiterated his forecast that the Irish economy would manage sustained growth from the second half of this year.
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Melanie Bowler, an economist at the ratings agency Moody’s, said: “Realistically sustained growth is unlikely to take hold until late next year, with continued pressure both at home and abroad.”